DAVID BLACKMON: Senate Passage Of The OBBBA Involved High Drama Around IRA Subsidies

Vice President JD Vance cast the tie-breaking vote as the U.S. Senate approved its final version of the One Big Beautiful Bill Act (OBBBA), 51-50, at mid-day Tuesday. That happy outcome for the Trump administration and congressional Republicans did not come without its share of high drama, much of which centered on language to phase out wind and solar subsidies contained in the 2022 Inflation Reduction Act (IRA).

The Senate Finance Committee’s version of the OBBBA, released on June 16, 2025,  served as the working baseline on those provisions. Unlike the House version, which imposes a strict 60-day construction start deadline and a 2028 placed-in-service requirement, the Senate’s initial change would have allowed full incentives for projects beginning construction by the end of 2025, with a stair-step phase out through the end of 2028.

But over the weekend, the bill was amended with a more restrictive requirement that projects be “placed in service” by the end of 2027. The change aligned more closely with the House’s stricter timeline and would significantly limit eligibility for projects not operational by 2027, posing challenges for developers with longer project timelines.

To almost everyone’s surprise, the revised language also imposed a new excise tax to be placed on any project which could not prove it was free of Chinese components. That would present a practical impossibility given China’s dominant position in the renewable energy space.

A Reuters report quotes several wind/solar developers and boosters saying the stricter provision and new tax would do severe damage to an industry which many critics say wouldn’t exist without massive government subsidies. Tesla founder and CEO Elon Musk, who has invested heavily in the solar industry, said on X that the new language “would be incredibly destructive to America!”